It doesn’t take an advanced degree in tax law or accountancy to figure out that the best tax is an efficient and fair tax. As part of its annual pre-budget consultation, the House of Commons’ Standing Committee on Finance has asked Canadians to tell them about the kind of taxes that we need.
The Wellesley Institute’s 2007 federal pre-budget submission says that the best tax for Canadians is one that is efficient and fair. Efficient means that the tax raises the revenues that are needed to invest in creating a healthy and prosperous Canada. Fair means taxes that based on ability-to-pay; that is, the people with more money should pay more taxes.
Tax policy can get very complicated when it gets twisted and distorted, and when politicians try to use taxes to achieve social policy objectives. A simple, easy-to-administer and hard-to-avoid tax system that raises the money that is required is a very important goal.
Right now, Canada is near the bottom of the league when it comes to social spending among the countries monitored by the Organization for Economic Co-operation and Development. We’re below the international average and that under-investment in education, health care, housing and other priorities is taking its toll on the people of this country. In recent years, the federal government has introduced very big tax cuts – especially for profitable corporations – and Canada’s corporate tax rate is now below that of our nearest neighbour and closest economic partner, the United States.